Everyone has an opinion about the validity of cryptocurrencies as a financial instrument. Many traditionalists in the world of fiat currencies and highly regulated institutions see crypto as fraudulent and a passing fad. Others want to rein it in and put regulatory controls in place, removing the decentralization of the cryptocurrency that is a huge part of its appeal.
As companies, countries, and regulatory bodies dip their toes in the crypto “waters,” the State of Ohio in the United States has taken an unusual stand, they are going to accept Bitcoin as payment of taxes. Yes, one of the largest States in the US has decided that cryptocurrencies are stable enough that people can use one to pay their State taxes. One word comes to mind, “Wow!”
According to an articleby Live Bitcoin News, businesses in Ohio will be able to pay a number of taxes using Bitcoin ranging from sales tax on cigarettes to employee income tax withholding. The article observes that this is a particularlyunusual move as cryptocurrencies have been dropping in value most of 2018 with Bitcoin fallingUSD 1,300 in value over the last seven days.
Still, Ohio is not alone. Legislators in the State of Georgia (US) proposed using Bitcoin to pay taxes earlier in 2018 and Seminole County in the State of Florida (US) approved accepting Bitcoin and Bitcoin Cash in payment of taxes.
So, why this move towards a cryptocurrency when most regulatory agencies and governments are less than receptive? According to Joel Greenburg, Seminole County’s Tax Collector,
We live in a world where technology has made access to services on demand, with same-day delivery and the expectation of highly efficient customer service and we should expect the same from our government. […] The aim of my tenure in office is to make our customer experience faster, smarter, and more efficient, and to bring government services from the 18th century into the 21st century and one way is the addition of cryptocurrency to our payment options.
Businesses in Ohio must register at www.ohiocrypto.combefore they can pay taxes with Bitcoin. They will have to supply the necessary details about the tax period, amount, etc. Finally, they must pay using a crypto wallet compatible with the State portal. The process is administered by BitPay, a cryptocurrency payment processor located in Atlanta, GA (US). Individual taxpayers are expected to be allowed to pay their taxes with Bitcoin sometime in the near future.
It’s too early to call these actions a legitimatization of cryptocurrencies. However, they are a start and an encouraging one for supporters of cryptocurrency and blockchain technology as an alternative to fiat currencies.